KARNATAKA ELECTRICITY REGULATORY …

1 KARNATAKA ELECTRICITY REGULATORY commission bangalore Dated 20th June 2006 Present 1. Sri Pandey- Chairman 2. Sri Subramanya- Member 3. Sri Ukkali- Member In the matter of : Implementation of Intra-State ABT No. B/09/5 O R D E R 1. Introduction The National ELECTRICITY Policy issued under the provisions of the ELECTRICITY Act 2003 envisages introduction of intra-state ABT and states as follows: The ABT regime introduced by CERC at the National level has had a positive impact. It has also enabled a credible settlement mechanism for intra-day power transfers from licensees with surpluses to licensees experiencing deficits. SERCs are advised to introduce ABT regime at the state level within one year . Accordingly, KERC had issued a discussion paper in December 2005 titled Action Plan for implementation of intra-state ABT inviting comments from various Experts and Stakeholders.

2 In the draft paper, the commission has listed out the various implementation issues such as metering of interface points, communication facility, setting up of Area Load Dispatch Centre (ALDC), tariff matters etc and has proposed implementation of the intra-state ABT in a phased manner. In response, 11 experts/stakeholders (list at Annexe-1) have furnished their views/comments on various issues. The comments received from stakeholders and the commission s views thereon are discussed in the following Paragraphs. 2 2. Primary issues on implementation of intra-state ABT. KPTCL in their response dated have stated that a co-ordination and monitoring committee under the Chairmanship of MD/KPTCL would be established to oversee and monitor the progress of implementation and that SLDC and Telecommunication divisions will be termed as responsibility centers for implementation and has further stated that it would be possible to implement intra-state ABT in the manner suggested by the commission .

3 KPTCL has since established a monitoring committee vide order dated and Chief Engineer, LDC has also been fully authorized to procure necessary infrastructure for setting up of communication network. Sri Rudrappa has observed that while the advantages of ABT are very well known, since Intra-state ABT envisages creation of ALDCs & providing sophisticated Interface metering at huge cost, it is incumbent that the benefit should be commensurate with investment. He has suggested that ESCOMs can regulate power consumption of large industrial consumers by installing TOD meters and by appropriate TOD tariffs. He has opined that introduction of intra-state ABT could wait for some more time. Sri Shankar Sharma has expressed that the decision to implement intra-state ABT in the state is a very progressive move and would herald a new era of discipline and responsibility on the part of all the concerned and the crucial issue is diligent implementation of the scheme at the beginning.

4 MESCOM has suggested that establishing ALDC requires time and it would be better to review the situation in Dec 2006 and decide the possibility of introduction of Phase I from It has suggested to coincide the implementation of the intra-state ABT with ESCOM wise tariff to consumers 3 so that the ESCOMs can pass on the additional burden of UI charges on selected consumers. BESCOM has stated that for successful implementation of the ABT, ESCOMs should have their own generation for regulation of their loads and should have capacity allocation to meet their demands. Considering the small volume of flexible generation capacity available (after excluding major IPPs, hydro power, CGS, Yelahanka DG Plant, and RTPS units 1 to 4 from the purview of intra-state ABT), the intra-state ABT cannot be implemented effectively. BESCOM has further stated that a level playing field has not been created for the ESCOMs since a major portion of high cost generation has been allocated to BESCOM by the GoK in the order dated , by which the other ESCOMs will be at advantage while issuing merit order dispatch.

5 IREDA has stated that ABT is not appropriate /practicable mechanism for projects based on NCE as availability is most unpredictable. commission s views: There is no doubt about the advantages of inter-state ABT which have been listed by the FOIR sub-committee and included in the draft paper issued by the commission . It is expected that the same benefits would flow in the case of intra-state ABT also. The commission notes that National ELECTRICITY Policy envisages introduction of intra-state ABT within one year and the FOIR has also recommended implementation of the same early. It would be appropriate to initiate action for implementation of the intra-state ABT now since it would take considerable time to complete the same in view of large number of interface points and the sophisticated communication facility and other infrastructure required.

6 The action plan also proposes phased implementation of the scheme. The 4 commission is also of the view that the scheme needs to be implemented diligently. On the point raised by IREDA, the commission has already taken note of this aspect and has stated in the draft paper that intra-state ABT would be applicable to Bio-mass and Co-generation plants of 25 MW & above only. Regarding the issue raised by BESCOM on allocation of high cost generation to it by GoK, the commission has already addressed GoK in the matter to allocate the generation to the ESCOMs in accordance with the Tariff Policy. As regards the point raised by the BESCOM regarding owning any generation capacity by the ESCOMs or limited availability of variable generation in the state etc, these aspects do not pose any constraints in implementing the intra-state ABT.

7 The commission appreciates the positive response of KPTCL and the action taken by it to implement the intra-state ABT as per the action plan proposed by the commission . 3. Metering The commission had suggested in the draft paper to complete fixing ABT compliant meters at the interface points of generators with the grid, between KPTCL and the ESCOMs and also for EHT/open access consumers including captive users before the end of March 06. BESCOM has suggested that only 400/220 kV IF points should be considered rather than all IF points for simplicity. Sri Bhanu Bushan, Member, CERC has opined that audit metering can be there upto 11 kV, but interface metering location should be at points where supplies to different ESCOMs branch off. He has strongly recommended to have interface point metering at 132 kV/33 kV level and has suggested that 5 meters have to be read only once a week and need not have continuous communication linkage for providing real time data.

8 KPCL has stated that action has already been taken by it to install ABT compliant meters at the interface points of the KPCL s generating stations and will be completed by the end of March 2006. Sri Bhanu Bhushan has stated that output capability need not be declared 15 minute-wise and it can be a MW figure for the whole day. commission s view: KERC is of the view that for implementation of ABT and UI mechanism within the state, installation of special energy meters on the periphery of all entities, which are to be covered by ABT and UI is a prerequisite. The commission finds merit in the suggestion of Sri Bhanu Bhushan to limit the interface points to 132 kV/33 kV level for effective implementation of the intra-state ABT. The commission informs the KPTCL/ESCOMs to take action to limit the interface points to 33 kV level wherever feasible including all future IF points and the number of IF points at the 11 kV level shall be minimized to the extent feasible.

9 Appropriate latest communication technology available shall be adopted by KPTCL/ESCOMs especially in view of large number of IF meters, While energy accounting is done on a weekly basis for the purpose of UI, real time data would be essential for ESCOMs/Generators to monitor the schedule. Regarding the ownership of meters and its accessories, the entities involved shall follow regulation-6 of CEA (Installation and operation of meters) Regulations, 2006 issued by CEA on 6 The commission appreciates action taken by KPCL to install ABT compliant meters at its generating stations and hopes similar action is already taken by other generating companies in the state. 4. Tariff The commission has stated in the draft paper that in order to implement the intra-state ABT, a two-part tariff is a pre-requisite for all the generating stations in the state and that KPTCL/ESCOMs shall take action to convert the single part tariff wherever existing to two-part tariff.

10 The commission has also suggested to adopt the UI charges as per CERC order till the same is determined by KERC separately and to continue the incentive linked to PLF for the present. KPCL has requested the commission to approve for recovery of fixed charges linked to availability as per the ABT tariff and also as suggested by FOIR sub-committee and guidelines of CERC. KPCL has also requested to fix incentives based on station availability as suggested by FOIR sub-committee. GMR Energy Ltd has stated that Intra- State ABT invites payment of UI Charges, which was not a part of the PPA. Implications of this on the PPA need to be ascertained. Correlation between the declared schedule and the plant availability on the annual basis for the purpose of reimbursement of fixed costs as per the PPA needs clarification. Tata Power Company Ltd has stated that the existing PPA provides for a two part tariff, fixed charges based on availability which needs to be continued and the variable charges on the actual energy sold at predetermined tariff heat rate.